CCS/HS/HCS/SS/SCS/SB 1099 - This act makes various changes
to the various Missouri tax credits and enacts the Tax Credit
Accountability Act of 2004. The act:

(1) Charges the Joint Committee on Tax Policy with an
automatic review by the committee after each of the Auditor's tax
credit program audits. After this period of review, the
committee is given the option to make an official recommendation
to the General Assembly as to the merit and suggested future
treatment of each credit. (Section 21.810)

(2) Includes the state Attorney General in the list of
people to whom the Director of Revenue may disclose information
regarding a taxpayer, if the information is pertinent to Attorney
General's investigation. (Section 32.057)

(3) Requires that any abatement or exemption in an
enterprise zone stop 30 days after the business closes or there
is a significant change in the type of business conducted. A new
owner can reapply to receive the abatement or exemption, but
cannot receive the benefit for any period of time beyond the life
of the zone.(Section 135.215)

(4) Establishes a system of classifications for tax credits
and minimum requirements for each classification. The
requirements are designed to verify compliance and instill
confidence in the tax credit system, but avoid undue burdens on
the individuals and businesses who apply for the credits.

The act follows established classifications and application
requirements where possible. The administering state agencies
are enabled to implement rules to include additional requirements
or explain the listed requirements. Any such rules are subject
to the standard rules promulgation and approval requirements.
(Sections 135.800 and 135.802)

(5) Implements reporting requirements focused on gathering
meaningful information in order to assist future legislatures in
assessing the value of tax credit programs. The reporting
requirements are varied to reflect the diverse landscape of the
currently enacted tax credits.

The requirements reflect differences between economic development
credits and social benefit credits that have benefits that are
not revealed in the same empirical fashion. Reporting occurs
over a period of three years for most credits. Annual reporting
is fixed to a date certain (June 30) for all reports.

Reporting is the duty of the recipient of the credit, and not any
subsequent purchaser, in the case of a transferred credit. An
exception to this is made in the case of contribution based
credits. These credits are obtained differently from other
credits. Contribution based credits are given to the a
contributor who donates money to a specific program. The state
policy is the promotion of the program, and thus reporting is the
duty of the recipient of the contribution and not the recipient
of the credit. Additionally, the act requires that a taxpayer
receiving a credit be made aware of the future reporting
requirements prior to issuance.

(6) Implements a compliance system for reporting. Failure
to meet the annual reporting requirements will result in
graduated penalties. A six month grace period and at least one
notice by certified mail to the last known address of the
taxpayer is included. Penalties also accompany fraud in the
application process. If fraud is found by a court of competent
jurisdiction, a one hundred percent penalty will be incurred.

Penalties are assessed against a noncompliant taxpayer as of the
end of the taxpayer's taxable year and due and owing as of the
last date of filing of the taxpayer's return. Further collection
procedures follow the existing collection procedures for income
taxes. (Section 135.810)

(7) Requires that prior to approval of any tax credit
application, an administering agency shall verify through the
Department of Revenue that the tax credit applicant does not owe
any delinquent taxes, including penalties and interest. Such
delinquency will not affect the approval of the application for
such tax credits, except that the amount of credits issued are
reduced by the applicant's tax delinquency. (Section 135.815)

(8) Requires that all administering agencies implement a
system of tracking issuance and redemption of credits. This
system should be developed with the cooperation of the Department
of Revenue who has already begun implementing a similar system in
certain cases. (Section 135.825)

(9) Specifies that the additional requirements of the
accountability act are in addition to all existing requirements
for such credits. (Section 135.830)

(10) Prohibits tax credits for donations to the Missouri
Higher Education Scholarship Fund and the Advantage Missouri
Program from being approved, awarded, or issued after January 1,
2005. (Sections 173.196 & 173.796)

(11) Provides that application information submitted by a
taxpayer seeking a tax credit be made subject to the Sunshine Law
once the credits have been approved. In the case where state
approval of a credit application comes prior to actual issuance,
the application data become open records at the time such
application is approved. (Sections 610.255 and 620.014)

(12) Expands the options of the Department of Economic
Development when the department engages in an agreement regarding
discretionary tax credits. Current law enables such agreements.
This act will allow the department to require that specific
purposes and goals for the incentive be set forth in each such
agreement. Current law also allows for recapture of such
discretionary credits where a taxpayer breaches the agreement.
This act will expand the recapture to include the additional
purposes and goals mentioned above. (Section 620.017).

(13) Expands the existing audit statutes for state
sponsored cost benefit analysis to require periodic examination
of all credits. Current law only subjects credits administered
by the Department of Economic Development to be analyzed. All
audits are required to be provided to the Governor, the
Legislature and, specifically, the Joint Committee on Tax Policy.
(Section 620.1300)
JEFF CRAVER